positive sentiment


Construction sector sentiment improves

KUALA LUMPUR: Both corporates and SMEs in the construction sector showed improvements in their respective overall indices in the latest Q2-Q3 2019 RAM Business Confidence Index (RAM BCI) survey.

Corporates construction sector exhibited an increase of 0.2 points – the only corporate sector of the five surveyed to have charted a better sentiment – to give an overall construction index reading of 53.2. This was led by a sharp uptick in their turnover and profitability indices (+1.2 points to 53.8 and +2.1 points to 54.2).

The sentiment among SMEs showed an even more significant turnaround, with the overall construction index rebounding from the previous negative sentiment reading of 49.7 to 51.2, attributable to a strong improvement in performance expectations.

The stronger business sentiment in this sector, in contrast with the largely sluggish disposition seen over the last few quarters, is mainly the result of a gradual resumption of public sector projects and more clarity in government policies in respect of these developments.

Despite the notable turnaround in the latest construction indices, the overall RAM BCI for Q2-Q3 2019 continues to indicate a subdued level of optimism in the next six months, with overall corporate and SME indices at 53.5 and 52.1, respectively.

According to the survey, the moderating trend is most stark amongst corporates which indicated continual dampened sentiment across the board in both performance and capacity building expectations.

However, the SME sentiment showed a notable reversal from the decline in the previous quarter, possibly attributed to a resumption of public sector projects and the commencement of goods and services tax (GST) refunds to smaller firms, which ease some cashflow pressure on SMEs.

Having said that, if organic growth prospects are not sustained, future sentiment among smaller firms could still wane.

Firms’ expressed reticence over capacity building remains the most prominent concern, as it could weigh on the momentum of economic growth and impact potential economic output over the longer run.

Although the respective sub-indices continue to record positive sentiment values of above 50, the latest survey shows that larger corporates have expressed considerably weaker intentions to expand capacity and commit to capital investments.

The RAM Business Confidence Index is jointly conducted by RAM Holdings Bhd and RAM Credit Information Sdn Bhd. Released quarterly, the index is based on data from a survey of close to 3,500 SMEs and corporates across five main industry segments respectively.

The seven business aspects surveyed are turnover, profitability, business expansion, hiring, capital investment, capacity utilisation and access to bank financing. An index value of 50 is the neutral benchmark while a value above 50 indicates positive sentiment by the firm; below 50 shows negative sentiment.

RAM expects local banks to be resilient against headwinds in 2019

KUALA LUMPUR, March 25 — RAM Ratings Services Bhd has maintained a stable outlook for the local banking sector this year, reflecting the industry’s sturdy fundamentals. RAM’s co-head of Financial Institution Ratings, Wong Yin Ching said while…

RAM BCI shows recovery in construction sector sentiment

KUALA LUMPUR, March 25 — Business sentiment among corporates and small and medium enterprises (SMEs) in the construction sector showed nascent recovery in the second and third quarters (Q2-Q3) of the year, according to the latest RAM Business…

KL shares end mixed, CI up 10.4 points

KUALA LUMPUR: Share prices on Bursa Malaysia ended mixed today with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) finishing at its intraday-high, but the market was broadly weaker by anticipations of another contracted Consumer Price Index (CPI) data for February.

However, the key index continued to be supported by buying interests in selected blue chips and heavyweights, tracking the positive sentiment in the region.

At 5pm, the benchmark index surged 10.40 points to end at its intraday high of 1,690.94 against last Friday’s close of 1,680.54.

The market opened 1.29 points better at 1,681.83 and moved between 1,681.36 and 1,690.94 throughout the day.

On the scoreboard, market breadth was slightly negative with losers outnumbering gainers 455 to 440, while 353 counters remained unchanged, 646 were untraded and 35 others were suspended.

Volume slipped to 3.26 billion worth RM1.92 billion from 4.67 billion worth RM3.67 billion last Friday.

Commenting on the weaker market breadth, a dealer said news that Malaysia was likely to see another low CPI data of 0.4% year-on-year (y-o-y) in February had left some investors feeling jittery.

This is because the country had just seen its January CPI data fell 0.7% y-o-y, the first deflation since 2009.

“The news had some implication on certain blue chips, especially the consumer products and services -related counters,“ it said.

A Bloomberg survey showed the February CPI, scheduled to be released on Friday, was likely to contract by 0.4% y-o-y, the second month of declines after January’s reading.

On Bursa Malaysia’s top losers list, five of them were consumer products and services-linked counters, namely Carlsberg, which fell 38 sen to RM25.36, BAT declined 30 sen to RM34.26, FCW shed 23.5 sen to 71.5 sen, Eng Kah slid 22 sen to 82 sen and Nestle was 20 sen lower at RM148.50.

Meanwhile, the dealer said investors would also watch closely the 15th Invest Malaysia Capital Market forum to be held tomorrow and Wednesday, as any updates from the major event could give crucial direction to the industry participants.

Of the heavyweights, Maybank gained two sen to RM9.49, IHH climbed seven sen to RM5.85 while Public Bank, Petronas Chemicals and CIMB all remained unchanged at RM24.48, RM9.25 and RM5.48, respectively.

Tenaga led the top gainers’ list by advancing 38 sen to RM13.06, while the top loser was Hong Leong Bank, erased 52 sen to RM20.76.

Stocks that were actively traded were Sapura Energy, which shed half-a-sen to 36 sen but its warrant ticked up one sen to 14.5 sen, Orion increased 1.5 sen to 20.5 sen, Destini bagged 2.5 sen to 34 sen, while PUC went down half-a-sen to 10.5 sen.

Regionally, Singapore’s Strait Times Index climbed 0.4% to 3,212.96, Japan’s Nikkei rose 0.62% to 21,584.50 and Hong Kong’s Hang Seng index jumped 1.37% to 29,409.01.

The FBM Emas Index firmed up 57.57 points to 11,816.75, the FBMT 100 rose 60.62 points to 11,663.34, the FBM Emas Syariah Index leapt 95.78 points to 11,843.86, the FBM Ace Index advanced 67.33 points to 4,901.78 and the FBM 70 was up 28.39 points to 14,237.47.

Sector-wise, the Industrial Products and Services Index was 0.19 of-a-point better at 170.89, the Plantation Index expanded 29.44 points to 7,285.63 but the Financial Services index declined 37.10 points to 17,500.0.

Main Market volume slipped to 2.16 billion shares worth RM1.69 billion from 3.81 billion shares worth RM3.46 billion last Friday.

Warrants advanced to 470.63 million units valued at RM94.53 million compared with 408.99 million units valued at RM81.37 million.

Volume on the ACE Market rose to 630.46 million shares worth RM132.11 million from 447.15 million shares worth RM120.07 million.

Consumer products and services accounted for 281.58 million shares traded on the Main Market, industrial products and services (386.27 million), construction (190.73 million), technology (146.92 million), SPAC (nil), financial services (36.21 million), property (131.83 million), plantation (28.36 million), REITs (16.66 million), closed/fund (51,000), energy (803.10 million), healthcare (29.27 million), telecommunications and media (48.97 million), transportation and logistics (30.01 million), and utilities (30.22 million).

The physical price of gold as at 5pm stood at RM165.25 per gramme, down 27 sen from RM165.52 at 5pm last Friday. — Bernama

Bursa ends mixed ahead of CPI data

KUALA LUMPUR, March 18 ― Share prices on Bursa Malaysia ended mixed today with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) finishing at its intraday-high, but the market was broadly weaker by anticipations of another contracted Consumer…

Analysts downgrade Lafarge after share price rally

PETALING JAYA: Analysts have downgraded Lafarge Malaysia Bhd after the rally in its share price last Thursday.

“With nothing concrete to justify yesterday’s share price performance, we feel that investor’s should take this opportunity to sell into strength. Downgrade to ‘sell’ (from ‘hold’) with unchanged target price of RM1.81,“ said Hong Leong Investment Bank (HLIB) Research in a note last Friday.

Kenanga Research also downgraded Lafarge Malaysia Bhd to “underperform”, while its target price remains unchanged at RM1.85.

The stock hit limit up to a high of RM2.60 last Thursday before paring gains to close at RM2.35. On Friday, it fell 10 sen or 4.3% to RM2.25 on 2.17 million shares done.

HLIB Research pointed out that the spike in Lafarge’s share price could be due to the corporate exercises taken by its parent company Lafarge Holcim in Southeast Asia recently, involving PT Lafarge Holcim Indonesia and Holcim Philippine Inc.

“Based on these latest corporate exercises, this may have led investors to speculate that the Malaysia outfit could be next in line for sale by its parent company.”

The research house said in comparison with its sister companies in Indonesia and the Philippines, Lafarge Malaysia does look like an attractive takeover target given its current price-to-book (P/B) multiple of 0.78 times.

“However, on the flip side, given the huge P/B valuation gap between the Malaysia unit against Indonesia and the Philippines, we reckon it is unlikely that the parent company will be willing to sell cheap.”

Apart from that, HLIB Research said the possible revival of the East Coast Rail Link project may also have stirred up some positive sentiment amongst cement players.

Kenanga Research noted that it remains cautious over Lafarge’s outlook in 2019 due to weak domestic demand woes and continuous overcapacity in the market leading to stiff competition and cement rebates wars.

“The group’s export strategy may partially help to drive revenue but given generally low margins from export sales, we do not expect any immediate significant bottom-line improvements.”

Lafarge is expected to post a narrowed net loss of RM241 million in 2019 compared with RM318 million in 2018.

“With narrowing losses, we expect our valuation basis to hold for now and will only re-rate upon firm earnings recovery to the black.”

Asian stocks, currencies boosted by China-US trade deal optimism

HONG KONG: Growing optimism that China and the United States will reach a trade deal lifted most Asian equities today while the positive sentiment also provided support to regional currencies against the safe-bet dollar.

The yuan was among the big gainers following a report that the US has called on China to stabilise the unit as part of any agreement between the world’s top economic powers.

Wall Street returned from a long weekend to provide a healthy lead as US President Donald Trump said trade talks – which resumed in Washington on Tuesday – were “going very well” but were “very complex”.

He also indicated he could put back the March 1 deadline for talks to be concluded – when US tariffs on Chinese goods are due to more than double – saying it is “not a magical date”.

Observers say that while there are no details about the negotiations the fact they are still talking and China appeared responsive to the call for yuan stability was good news.

Hong Kong rose 1% while Shanghai ended up 0.2% and Tokyo closed 0.6% higher. Seoul, Taipei and Manila each climbed more than 1%, Singapore put on 0.4% but Sydney slipped 0.2%.

The upbeat mood on trading floors gave investors confidence to buy higher-risk currencies, pushing the South African rand around 1% higher and Australia’s dollar up 0.7%. The yuan also climbed 0.7%.

The pound held its gains after strong British jobs and wages data, while it was also getting support from hopes that Prime Minister Theresa May could win changes to her Brexit deal with the European Union as she heads to Brussels later in the day.

While EU leaders have said they are not willing to bend on the agreement, analysts say there could be some movement that would help her push it through parliament and avoid a messy divorce that could hammer the British economy.

“The EU is showing some possible concessions about the timing of the exit, as (European Commission chief) Jean-Claude Juncker has said a delay beyond the European parliamentary elections in May would not be opposed, but the UK has to request it, which they have not done,“ said Alfonso Esparza, senior market analyst at OANDA.

In Europe at mid-day today, London’s FTSE 100, Frankfurt’s DAX 30 and Paris’ CAC 40 were all up 0.3% each. – AFP

Bursa Malaysia ends higher on stronger buying demand

KUALA LUMPUR: Bursa Malaysia ended the day higher as stronger buying demand in heavyweights helped lift the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI).

At 5pm, the index finished 19.62 points higher at 1,726.18 from 1,706.56 at close yesterday.

After opening 6.27 points firmer at 1,712.83, the local index moved between 1,711.44 and 1,727.25 throughout the day.

A dealer said market sentiment was positive with investors optimistic that the latest round of trade talks between the world’s two giant economies would lead to a deal to resolve their tariff war.

“This positive sentiment is reflected in the stronger performance of Wall Street and spilled over into Asian stocks, with the MSCI’s broadest index of Asia-Pacific shares outside Japan, up nearly one per cent to reach its highest level since Oct 2, 2018.

“On Wall Street, the S&P 500 index rose 4.16 points to 2,779.76, the Nasdaq Composite increased 14.36 points to 7,486.77 and the Dow Jones Industrial Average was 8.07 points better at 25,891.32,” he added.

Among local heavyweights, Maybank rose four sen to RM9.52, Public Bank and Tenaga gained six sen each to RM25.06 and RM13.38 respectively, while Petronas Chemicals surged 26 sen to RM9.15.

Of actives, Sapura Energy inched up 1.5 sen to 32.5 sen, Hibiscus Petroleum gained three sen to RM1.08 and Bumi Armada was one sen better at 22.5 sen.

Market breadth was positive with 724 gainers and 252 losers, while 346 counters remained unchanged, 532 untraded and 20 others suspended.

Total volume increased to 3.82 billion units valued at RM3.26 billion from 2.80 billion units valued at RM2.36 billion transacted yesterday.

The FBM Emas Index increased 170.21 points to 12,040.78, the FBMT 100 Index rose 166.37 points to 11,897.51 and the FBM Emas Shariah Index jumped 197.45 points to 12,041.45.

The FBM 70 rose 330.74 points to 14,486.38 and the FBM Ace Index increased 37.58 points to 4,699.69.

Sector-wise, the Financial Services Index added 117.28 points to 17,783.73, the Plantation Index rose 96.12 points to 7,498.56 and the Industrial Products and Services Index bagged 2.64 points to 168.49.

Main Market volume was higher at 2.78 billion shares valued at RM3.03 billion from 1.87 billion shares valued at RM2.18 billion recorded on Tuesday.

Warrants’ turnover rose to 741.67 million units worth RM162.26 million from 609.05 million units worth RM120.56 million yesterday.

Volume on the ACE Market decreased to 295.17 million shares worth RM68.74 million from 317.97 million shares worth RM55.18 million.

Consumer products and services accounted for 316.42 million shares traded on the Main Market, industrial products and services (309.21 million), construction (236.86 million), technology (161.16 million), SPAC (nil), financial services (73.74 million), property (220.06 million), plantations (63.60 million), REITs (16.38 million), closed/fund (24,800), energy (1.19 billion), healthcare (41.44 million), telecommunications and media (67.56 million), transportation and logistics (35.28 million), and utilities (51.02 million). — Bernama

Bursa closes higher on buying sentiment

KUALA LUMPUR, Feb 20 — Bursa Malaysia ended the day higher as stronger buying demand in heavyweights helped lift the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI). At 5pm, the index finished 19.62 points higher at 1,726.18…

Bursa's climb continues at mid-afternoon

KUALA LUMPUR, Feb 20 — Bursa Malaysia remained higher at mid-afternoon due to gains in heavyweights as market sentiment was lifted by higher US stock performance and optimism that China and the United States will reach a deal in their trade talks….